The MEA spokesperson was keen to assert that welcoming the deal would not have any impact on India's "traditional support for the Palestinian cause".
Israel and the UAE had no diplomatic relations.
Israeli Prime Minister Benjamin Netanyahu had promised the annexation against the wishes of the Palestinians and much of the West.
"The Palestinian leadership announces its strong rejection and condemnation of the trilateral agreement to normalise relations between Israel and the UAE, mediated by the United States", the statement read.
Forging closer links between Israel and Arab nations is a key pillar of Mr Trump's strategy for the Middle East, and the diplomatic coup on Thursday could provide a major boost for USA elections in November.
The Palestinians had rejected the plan outright as biased and untenable, as did Israel's Arab neighbours, and it sparked fears of more violence.
Lucas Ocampos scores victor for Sevilla vs. Wolves in Europa League
Wolves are the underdogs (pardon the pun) as they are +235 to beat Sevilla who are +120, but the tie at +230 is interesting. It's basically the same group of players. "Everyone is disappointed but we should not ignore the effort of the players".
Israel talked of "history" and Palestinians of "betrayal" after Thursday's surprise announcement of a deal to normalize relations between the Jewish state and the United Arab Emirates. In that context, we welcome the full normalisation of ties between UAE and Israel.
UN Secretary General Antonio Guterres has welcomed the agreement between Israel and the United Arab Emirates to establish full diplomatic ties, expressing hope that the accord will lead to Israeli and Palestinian leaders re-engaging in "meaningful negotiations" for a two state-solution.
Palestinian President Mahmoud Abbas recalled the Authority's envoy from Abu Dhabi and demanded that the Arab League address the issue of the agreement in an emergency meeting.
Jordan, which borders the West Bank and Israel, said the outcome of the agreement would depend on Israel´s actions, including its stance on a two-state solution with the Palestinians.
Various other leaders have also moved swiftly to hail the deal, including Egyptian President Adel Fattah al-Sisi who said: "I value the efforts of those in charge of this agreement in order to achieve prosperity and stability for our region".
A peace deal has finally been struck between Israel and UAE but peace takes more than signatures and handshakes.
Meanwhile a spokesman for the foreign ministry of Iran, the former Persian empire, said: "The oppressed people of Palestine and all the free nations of the world will never forgive the normalising of relations with the criminal Israeli occupation regime and the complicity in its crimes".